A Florida regional bank on Thursday agreed to pay the U.S. Treasury Department $6.5 million to resolve allegations that long-term deficiencies in its compliance program helped facilitate a $1.2 billion Ponzi scheme.
An expected U.S. Treasury Department regulation aimed at improving corporate transparency may do more than task banks with additional recordkeeping. It could also expose financial institutions to greater civil liability when compliance goes wrong.
Add to the fallout of the largest-ever known Ponzi schemes another change to bank behavior: institutions are keeping more investigators tied to their desks in an attempt to identify big frauds.
U.S. financial regulators Monday fined Canada-based TD Bank $52 million for willfully failing to report suspicious transactions tied to one of the largest-ever known Ponzi schemes.
Plaintiffs suing Toronto Dominion Bank over its ties to a convicted Ponzi schemer will likely reject a proposed comprehensive settlement that would grant the institution immunity from future litigation, say attorneys.
Federal financial regulators are questioning TD Bank about potential Bank Secrecy Act compliance lapses identified in the wake of the conviction of Florida-based Ponzi schemer Scott Rothstein, say sources.
In the legal wrangling that inevitably follows the collapse of Ponzi schemes, banks often escape liability. But in at least three lawsuits settled against two banks in the past year, financial institutions have been asked to pay up, and substantially.
Identifying good guys and bad guys in real life is complicated: court documents released this month in connection with investors' lawsuits against the banks that served Ponzi schemer Scott Rothstein don't always make it clear - except with regard to Rothstein himself - who the villains are.